Ah, another type of market assholery. Price discovery mechanism that's free for the builders, but very expensive for the would-be customers. About as nice as grading on a curve.

I wonder if there's a space for business for an intermediary who would take on multiple builders for your single home, wait for them to do their price discovery dance, and then drop every one of them except for the cheapest one.

Disrupting schedules isn't free for customers either.

"I wonder if there's a space for business for an intermediary who would take on multiple builders for your single home, wait for them to do their price discovery dance, and then drop every one of them except for the cheapest one."

Having worked with subcontractors a race to the bottom is not a good plan. IMHO subcontractors cost is directly proportional to experience. Simple unseen things will get missed eg: wrong type of drywall in the bathroom.

An intermediary like the mob, perhaps?

Do mobs do this?

No, I meant a legitimate intermediary. If builders get to overcommit and then cancel on their customers, why shouldn't a customer be able to do it too? The intermediary would just offer a service of doing that for you - booking multiple companies for your construction project, waiting until the last second, and cancelling all but one.

> If builders get to overcommit and then cancel on their customers, why shouldn't a customer be able to do it too?

Why couldn't they? I'd imagine the only problem is it is an ineffectual strategy for a client. There is a lot of money involved, people are already doing everything they can think of to get the lowest price.

It is absolutely a dick move to lead someone on, but in the grand scheme of things a minor problem. Construction is a mess of problems.

Builders often require a nonrefundable deposit to purchase materials prior to the start of a job. That’s where the squeeze happens, after you’ve already selected your contractor.

Huh, so they overcommit, accept deposits, then force some of those customers out - do they return those deposits then? If not, how is this not criminal?

Because the customers are the ones quitting, they forfeit the deposit by their contract.

The developers aren't held to a timeline in the contract. They just stall forever, working on the ones willing to pay the most. If they ever ran out of better customers, they would eventually get around to the cheaper customers.

They've done something unethical, but they haven't broken the contract.

Systematically getting people to hand over money when you have no intention to deliver on and have no intention to return is probably fraud.

Probably. The attorney general is working on actual fraud. This is just probably fraud. No time for that! I think there’s a healthy dose of buyer beware to be had, though that almost seems victim blaming.

Right. But to the extent the developers are doing this on purpose, as part of their business model, this very much feels like a racket.

The only reason they developers can do this is there is a lack of people that can build houses creating a non competitive market. A huge portion of US home building is built on migrant labor which has been in short supply since 2016 and even further pressure from covid. Moreso housing is a boom bust style market that squeezes out competition during busts and increases prices during booms. This is how supply and demand curves work in this market.

> then raise prices until the most cost-conscious customers drop out.

Typically they don't even care about customers dropping out. They just work down their list from the highest quotes to the lowest. The customers who were quoted a low price simply never get their job started unless work dries up for the contractor.

So basically an indirect auction mechanism?

General price discovery. Not too different, but auctions would have multiple people bidding on the same unit, rather than simply the same build plan here.